Each month Devenir highlights a selection of articles to keep you abreast of the latest trends and developments in the HSA marketplace.
A summary of the articles included in the August 2018 edition:
- House Passes Bills Expanding Health Savings Accounts
- New Alegeus Research Demonstrates Health Savings Account Participants Are Healthcare’s Savviest Consumers
- Waterbury-Based Webster Bank Sees Growth Surge From Increased Health Savings Accounts
- Consumer Directed Health Plans: A Step in the Right Direction
- The Hierarchy Of Tax-Preferenced Savings Vehicles For High-Income Earners
House Passes Bills Expanding Health Savings Accounts
The House of Representatives on Wednesday passed two healthcare bills that would expand the use of health savings accounts, a move that, if advanced, could significantly drive higher employee enrollment in high-deductible health plans that feature HSAs.
The Restoring Access to Medication and Modernizing Health Savings Accounts Act, or HR 6199, takes several steps to modernize HSAs by allowing plans to provide coverage before the deductible is met, increasing flexibility for retail and onsite clinics, and treating certain over-the-counter drugs as qualified medical expenses. It passed 277-142.
New Alegeus Research Demonstrates Health Savings Account Participants Are Healthcare’s Savviest Consumers
Alegeus, the market leader in consumer directed healthcare (CDH) solutions, today announced part one of its two-part research series on health savings account (HSA) participants, the 2018 Alegeus HSA Participant Profile, which provides unique insight into account holder demographics, fluency and behaviors. The report was commissioned to better understand how HSA participants use their accounts and, more broadly, how they engage in their healthcare compared to the general population.
Waterbury-Based Webster Bank Sees Growth Surge From Increased Health Savings Accounts
John Ciulla, president and chief executive officer of Webster, told industry analysts that the health savings account business, known as HSA Bank, “delivered another quarter of strong performance.” “Our 2.7 million accounts now have total footings of $7 billion,” Ciulla said. “This consists of $5.5 billion in low-cost, long-duration deposits that help fund Webster’s earning assets and $1.5 billion in linked investment balances. Total accounts were 13 percent higher than a year ago.”
Consumer Directed Health Plans: A Step in the Right Direction
Recently, the House Ways and Means Subcommittee on Health has been considering ways to expand consumer-directed health plans (CDHPs). These plans – which essentially balance high deductibles with Health Savings Accounts (HSAs) – are a step in the right direction. CDHPs save employers money and allow them to give workers more cash compensation rather than expensive health benefits. They can also lead to reductions in overall health-care spending without harmful effects on our health.
The Hierarchy Of Tax-Preferenced Savings Vehicles For High-Income Earners
Relative to the alternative of simply keeping available dollars “liquid” in a bank account or a traditional (taxable) investment account, the appeal of tax-preferenced accounts is, by definition, their tax preferences. Which means, not surprisingly, the optimal approach amounts to maximizing the “best”-preferenced accounts first, and as those various contribution limits, “spilling over” the next/additional savings to the next best tier on the hierarchy. In this context, the first and best place to commit to long-term tax-preferenced savings for high-income individuals is an HSA, the only triple-tax-free option available that provides a tax-deduction upfront, tax-deferred growth, and tax-free distributions.